First Solar sale sees light at the end of the tunnel

The project was licensed in January 2011 and started construction two months later.

At that time, the developer said the facility’s $300 million first phase, with a production capacity equivalent to 250 megawatts per year, would start operations in late 2012.

According to their plan, the total investment in the project would eventually reach $1.2 billion. It would be the first solar panel manufacturing facility in Vietnam employing advanced thin-membrane technology.

However, just eight months after construction kicked-off, the developer announced its decision to postpone the project.

A top executive at First Solar said the decision was made based on a supply-demand imbalance in the global market.

In July 2012, the project again aroused public interest when property advisory firm Cushman & Wakefield announced they would be representing First Solar in seeking investors to buy the facility, located in Ho Chi Minh City’s Dong Nam industrial park.

The investor said they wanted to finalise a sale within 12 months time.

In light of the existing laws, for sizable projects like that of First Solar’s there are two options for transferring ownership.

The first is a capital transfer to a partner. In this case, the partner would be responsible for maintaining the business field and investment level First Solar registered. The other option is an asset transfer (sale of the facility as is) which would require the developer to have basic legal documents showing, for instance, ownership of the land and the existing assets on that land.

At a press conference in October 2013, a representative from Ho Chi Minh City Export Processing and Industrial Zone Authority (Hepza) said, “The project’s factory has attracted significant investor attention, but a transfer is still impossible due to issues related to land and assets.”

In a talk with VIR late last month, head of the Business Management Department at Hepza Bui Thi Nu said it was nearly impossible to find a suitable investor to continue and finish the First Solar project as due to the scale of the project, the investor is looking to the second aforementioned option – selling its assets.

“The necessary legal procedures for the project will soon be completed. The procedures, including a land-use certificate and a certificate for the assets on that land, are being notarised,” Nu explained.

Nu also said that the developer’s representative, Cushman & Wakefield, has worked with Hepza and city authorities to speed up the process.

This means the project’s legal obstacles have been nearly settled, paving the way for the developer to take the next step, which is likely to be a transfer of their assets (production facility) to a suitable partner.

A Hepza report in late 2013 showed that First Solar’s panel project had been suspended due to effects of the global recession that the developer had thus far invested $50 million.